Norton Bill Continues Her Home Loan Modification Initiative (10/28/2010)
Norton Bill Continues Her Home Loan Modification Initiative
October 28, 2010
WASHINGTON, DC -- Congresswoman Eleanor Holmes Norton (D-DC), one of the first federal officials to call for a moratorium on foreclosures until lenders demonstrate that they and loan servicers are meeting performance obligations, announced today that she will introduce legislation when Congress returns from recess on November 15 to help struggling homeowners stay in their homes and to stabilize the housing sector. Her bill will (1) permit independent third parties (i.e., certified housing counselors and other non-profits) to make a proposed modification, which banks would then have three months to accept or reject, and (2) allow foreclosed homeowners to rent their homes at market rates until a homebuyer is found. Both sections seek to expedite moving properties with as little damage to homeowners as possible.
Norton, like her colleagues across the country, continues to receive many calls from constituents about banks' unwillingness to modify mortgages. "Banks were woefully unprepared to help remedy the effects of the housing crisis, which they created," Norton said. "The recent revelations of improper or fraudulent foreclosures are only the latest examples. However, banks simply do not have the staff or systems in place to help struggling homeowners, even when it is in their economic interest to do so. My bill will help banks with the backlog of modifications by doing some of the preliminary work that may be slowing banks' processing of modifications. The bill will help clear the system by helping homeowners to quickly receive a final decision on their modification or on their possible foreclosure. The bill also will help homeowners to avoid the dread of finding a place to live in the event of foreclosure, giving them time to rent their homes while they look for a more permanent place to live and avoiding the devastation to neighborhoods of abandoned houses.
In June, the Congresswoman, along with the Department of Treasury and the Department of Housing and Urban Development (HUD), held a "Saving Homes, Foreclosure Prevention Day" event, where HUD-approved counselors, 13 mortgage lenders, and Fannie Mae and Freddie Mac provided one-on-one services to 765 homeowners. Norton is seeking additional legislation because none of these constituents have as yet qualified for the Save Our Homes program or the Home Affordable Modification Program, despite the modifications some were promised at the event. Norton also wrote a letter last month to Treasury Secretary Timothy Geithner expressing concern about allegations from her constituents who attended the foreclosure prevention day of "stonewalling" by lenders and complaints about bureaucratic red tape.